The 2025 Budget Law (Law No. 207/2024) introduces several significant changes to the taxation of crypto assets in Italy.
1. Confirmation of the 26% Substitute Tax
Article 1, paragraph 23, explicitly states that capital gains and other income related to crypto assets are subject to a 26% substitute tax, aligning them with other financial instruments. While this provision appears to clarify the applicable tax rate, some experts believe it may also have retroactive implications, affecting past transactions and gains.
2. Increase in the Tax Rate to 33% (from 2026)
Starting January 1, 2026, the substitute tax rate on crypto-related gains will increase to 33%. This applies to all taxable crypto transactions, including sales, swaps, and holdings. The increase will also affect taxpayers who opt for the administered or managed savings regime, making crypto investments subject to higher tax burdens. Some observers view this as a reflection of the government’s stricter stance on cryptocurrencies.
3. Removal of the €2,000 Tax Exemption
Previously, crypto capital gains below €2,000 per tax year were exempt from taxation. The new law eliminates this threshold, meaning all crypto-related gains, regardless of their amount, must now be declared and taxed. This change is expected to particularly affect small investors, including younger individuals who often engage in minor crypto transactions.
4. Elimination of the €2,000 Deduction Limit for Loss Carryforward
Under the previous system, crypto-related losses exceeding €2,000 could be carried forward to offset future gains. The new law removes this limit, allowing taxpayers to deduct all their crypto losses from future gains, provided they report them in their tax return for the relevant period.
5. Reintroduction of Tax Step-Up for Crypto Assets
The law also reintroduces an optional tax step-up (affrancamento), allowing investors to adjust the fiscal value of their crypto holdings as of January 1, 2025, by paying a substitute tax of 18%. This is similar to the 2023 step-up scheme, but with a higher tax rate (previously 14%). Investors choosing this option must pay the tax by November 30, 2025, either in a single installment or in three annual payments with 3% interest on the deferred amounts.
Conclusion
The new tax measures significantly tighten the fiscal framework for crypto assets, increasing tax rates, removing exemptions, and requiring more comprehensive reporting. While these changes aim to enhance tax compliance and government revenues, they could also impact Italy’s crypto market by discouraging smaller investors and increasing regulatory burdens.